This is mostly a review of the strategy Amazon is using with the Kindle DX and its chance of succeeding. You can read my Kindle DX review (technically a preview) if you’re deciding whether to buy it or not.

That being said …

Positive Indicators and Things that indicate Kindle DX will succeed

Concrete Signs Kindle DX might succeed

People are actually pre-ordering. We know from what various kindle blog sites are writing and what people are commenting at forums etc. that a decent number of people have actually pre-ordered the Kindle DX.

Although the tone of nearly every kindle dx review at news sites and big blogs is negative, the anti-dx arguments all hinge on price or its inability to cook you breakfast (in addition to being an etextbook reader). Even in the recession there are a lot of people for whom $489 is not a deal breaker.

Indicators and Hints Kindle DX might succeed

The amount of interest is high and is staying at the level of interest in the Kindle 2 –

Kindle DX Web Search Volume

A lot of Kindle 2 owners are upset that a new product was released so soon and are trying to exchange – Surely, this means they feel the Kindle DX is worth the higher price.

Signing up 3 of the major textbook publishers is a coup and indicates that Kindle DX might have very strong content options for students.

Things that do matter

By announcing the price really early Amazon has anchored it i.e. people are not going to be shocked into inaction when it is released.

In addition the lead time lets people get used to the more expensive price, and sets up the Kindle DX to even seem like a bargain if a $50 kindle dx coupon were thrown into the mix down the line.

Being the first company to announce a larger screen eReader available this year gives Amazon a distinct edge.

The current interest and preorders give Amazon data on actual and potential demand and they can set up manufacturing accordingly. This, in my opinion, is the real reason for the ridiculous ‘preorder dx now and we’ll ship it sometime after a few months’ strategy.

Negative Indicators that hint at the Kindle DX not succeeding

Concrete Signs

The most likely customer base i.e. Kindle 2 and Kindle owners, aren’t ready for a new product launch just 3 months after Kindle 2 was announced. Kindle forums and blogs are clearly indicating this.

Indicators

Amazon has moved from displaying Kindle 2 + Kindle DX on its main page to often displaying just the Kindle DX. Surely, this is them drumming up interest.

There are a very small number of newspapers and universities running trials.

There are still no physical kindle retail locations – which is an even bigger factor for the DX given the higher price.

Things that Do Matter

Price – Price is not going to kill the Kindle DX. However, it will rule out some people from ever becoming Kindle DX owners.

Additionally, every kindle dx review saying the price is high (without going into the specifics i.e. the technology is still maturing) creates the perception that dx is overpriced.

Lack of Availability – A preorder with no ship date means you lose a lot of potential customers (since dx wasn’t available at their moment of impulse purchase).

Lack of Sustained Impact – Kindle DX saw a huge spike in interest which is now gone. After a few months, when it’s available there will be another spike. This is, however, not as impactful as having two spikes of interest within the same month (which the Kindle 2 announcement and launch facilitated) –

By releasing details early Amazon has exposed their product to competitors who now have the opportunity to release earlier or mold their own products to compete better.

Closing Thoughts

Showing their hand early is a risky move – It does however give Amazon a lot of valuable feedback on actual interest in the DX, how the DX gets reviewed, and what people’s concerns are. Combine this with the fact that they can set their manufacturing targets based on preorders and current buzz and its a good, solid strategy.

Amazon has indicated, and the success of the Kindle 2 makes it likelier, that they intend to have Kindles around for 10 or more years. The Kindle DX becomes the first iteration of their attempt to capture the college textbook market and expand the Kindle family. I feel the DX family of Kindles will be a huge success – perhaps with the current version at a slightly lower price point, perhaps with dx 2.

Its almost as if Amazon has decided that its better to release quickly, fail if need be, and get enough data to set up the DX line of products to succeed down the line. The other thing I wonder about is the impact the dx is having on kindle 2 sales.

I think Amazon felt they had to rush the DX out there to get it firmly established in the marketplace before Plastic Logic comes out with their device in early 2010, even though Amazon knew it might piss off the Kindle 2 owners. There is little concrete info on the Plastic Logic device– not even its name– and a lot of folks are speculating it will be vastly superior. Certainly, with a touch screen it will be a different experience, and will probably be sturdier, but no one really knows much about how the documents will get onto the device (their website says it has wireless, but some speculate that means Bluetooth rather than relying on a cell-phone network, like Kindle). Their marketing is clearly aimed at “the mobile business professional” rather than students or recreational readers, which may mean it’s even more expensive than Kindle DX. We shall see.

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